20 Pips Per Day

Date: 2024-12-28

Profiling 20-Pip Opportunities

[00:17] Welcome back, folks. This is lesson three of the May 2017 ICT Mentorship, ICT Amplified Day Trading and Scalping. This lesson is teaching 20 pips per day, targeting 20 pips per day.

Before we get into it, let me preface it by saying: you will not make 20 pips every day, period. I can't promise you that. No one can promise you that. But there are certain things we're going to cover here today that give us the potential to hunt for this as a daily objective. Not every trading day is like all the others, so one day may have a lot more opportunity than another.

[01:01] Other days may not have any opportunity at all, despite what your charts may be showing you. You have to be mindful of that. Obviously, we all know there have been many times when I've looked at things and called for certain things to happen, and they didn't happen at all.

Ideally, you want to bank 20 pips in any day trade you take. So every trade you get into, once you're in profit, at least take something off at 20 pips. That's the surest way of banking 20 pips per day.

[01:30] So if you're in there trying to trade every single day—not that I'm advocating that or enticing you to do it—if you do and you get 20 pips, always try to bank something at 20 pips.

However, there are a few techniques you can use to ferret out a 20-pip scalp almost every day. Again, the emphasis there is almost. The trader still needs to do their homework and determine what the current market environment is: consolidating, reversing, or expanding. It's all about market profiling.

In this lesson, I'm going to teach you two methods I like to scalp with and aim for 20 pips.

Asian Session Stop Raids

[02:08] Okay, I get a lot of questions about how I trade the Asian session. Obviously, I don't like trading it that much, but when I was actively trading Asia, this is one of the ways I did it.

This is a good approach, technique, method, pattern—whatever you want to call it. It's almost like a complete system in itself. What we're doing is trading the 15-minute New York session stops. This pattern is good for Yen, Aussie, and Kiwi crosses.

[02:45] The buy setup is during the Asian session up to 12:00 a.m. New York time. You're going to scout short-term lows formed during the New York session.

Now, it's going to be very late in the New York session, getting ready to transition into the beginning of Asia. Obviously, I'm skipping over Aussie and New Zealand. But in my way of thinking, it's New York going into Asia. I don't mean to be disrespectful to the folks in New Zealand or Oz, but that's simply the way I view it.

[03:22] Sorry. So late New York, for me, is basically going into the New Zealand and Aussie open. You'll hear me say it like that, but the way I interpret it is that when New York closes, we're going into Asia. That's just the way I interpret it.

I'm sure some of you who are highly critical will want to correct me and say, “Well, that's not really what that is.” But I'm just telling you how I do it.

[03:52] And if it means anything else to you, I don't trade it that much because I think the bulk of the volume should be traded in London and New York.

But for completeness' sake, for those who are desk jockeys in North America and simply cannot participate during London or New York because of sleep, jobs, businesses, or whatever life circumstances they have, if you want to trade the Asian session, this is one reliable way of approaching it.

So the buy setup, again, is during the Asian session up to 12:00 a.m. New York time.

[04:24] We're going to be scouting short-term lows formed during the New York session and trading long after Asia probes the low. In other words, what we're basically looking for is a Turtle Soup long.

The sell setup is during the Asian session up to 12:00 a.m. New York time. We're going to be scouting short-term highs formed during the New York session and trading short after Asia probes those highs.

We're timing off a 5-minute chart. We're targeting 20 pips, and it's a fixed target. We're not graduating it. We're not trying to turn it into some huge mountainous pile of pips.

Fading the Asian Range

[05:02] It's straight 20 for 20—20-pip stop, 20-pip target. That's it.

So what does it look like? Well, we have an example here. As indicated on the chart, you can see there is a short-term high formed prior to the Asian session start. That short-term high is going to have a very small pocket of stops resting above it. It's delineated here as late New York stops.

When I look at this, I interpret it as a very low-volume liquidity run. Essentially, what we're doing is beginning the Asian Range.

[05:48] So what we're really doing is interpreting the Asian Range high forming. When price moves above that short-term high formed prior to the Asian session start on a 5-minute basis, if it trades above that high, we can look to go short and take 20 pips.

The blue ranges you're going to see in this video all delineate what 20 pips looks like. Obviously, many of these trades go well beyond 20 pips, but for the sake of showing you what the opportunity looks like, I'm displaying it only within a 20-pip spectrum.

[06:30] The setup usually occurs before New York midnight. So what we're actually doing is trading inside the Asian Range while expecting the Asian Range to behave as it typically does—as a consolidation.

Many times, that Asian high will form after a short-term high like the one being delineated on your chart. Once that high is taken out, they fade it and take price the other way, lower, forming the Asian Range low.

Many times the Asian Range is much larger than 20, 30, or 40 pips, but many times there's at least enough range there to extract 20 pips.

[07:10] Here's another example. This is Dollar-Yen. Another short-term high. Price trades above it during the Asian session, and we fade that. Twenty pips is seen before midnight during the Asian Range, as we define it.

So from around 8:00 p.m. New York time, we see a small rally up, they fade it, and price trades lower. Twenty pips allows you to bank that.

Now look over toward the far left side of the chart and you'll see there's a Fair Value Gap there. That's what price was ultimately reaching down toward.

[07:52] So there's a lot more downside potential beyond those 20 pips. That's what makes these trades, in my opinion, favorable if you're going to trade Asia.

You're not trying to get rich on them. You're not trying to make 100 pips. But you use all of the PD Array Matrix ideas I've given you in terms of premium and discount to reach for those objectives as well on these lower time frames.

Here's another example. This is Dollar-Yen. Price trades above a short-term high right at the Asian session.

[08:30] Again, we're anticipating consolidation. So there's nothing to fear. We're looking for the general sideways environment the Asian session typically creates.

Now, I know some of you are going to say, “Well, what happens if it just keeps running higher?” Then you get stopped out. Your stop is 20 pips, just like any other trade.

You have to have a filter for preventing excessive losses from occurring, so your stop loss is fixed at 20 pips.

When price trades above the short-term high, as soon as it trades above it, you're looking to sell short.

[09:04] “How many pips above it, Michael?” I don't know—five. Five is a good number. Some of you are going to be really aggressive and want to sell it just one or two pips above the high. Preferably, I like five pips above the short-term high. If I can get that, great. If I can't, then I miss it. That's fine.

Here's another example. Short-term high, price rallies above it during the Asian session, creating the Asian Range high. Price fades that. The blue box delineates the 20 pips that would be there for a potential payout, and you can clearly see it moves a lot more than just that.

[09:47] Again, you're probably being overly critical because it seems like, “Well, where's the definition behind the trades?” Look at your higher time frame.

Even if these trades are ultimately looking to continue higher or lower, all we're looking for is that initial wick above a short-term high or below a short-term low. Preferably, in market continuations, if we're bullish, we can still see selling above a short-term high like this. Many times those actually work out better because what you're doing is pricing in the Asian Range high.

Asian Low Sweep Setup

[10:30] And what do we look for with upside movement? That Judas Swing lower. So we're already anticipating an Asian Range that's probably going to want to trade lower.

Or, if the move starts a little bit earlier than midnight, price can trade down, make the Judas Swing there, give you your 20 pips, and then begin moving higher to make the higher close on the day without really requiring the London session's Judas Swing.

Here's another example. This is Kiwi-Dollar. At the beginning of the Asian session, we have a short-term low.

New York Expansion Framework

[11:06] Price trades down below that short-term low, just probes it, takes out the liquidity below it, and then rallies higher. The box represents 20 pips. Again, you can see that price continues even further, but all we're doing here is looking for an opportunity to trade between 8:00 p.m. and midnight New York time.

Okay, our second way of scalping 20 pips: we're going to be trading the New York expansion. This is a pattern that's good for all pairs. There's no special favorite pair for this.

[11:50] It's a universal application. The buy setup is during the New York session up to 10:00 a.m. New York time. We're scouting short-term lows formed during the New York open, trading long after New York probes those lows while the London session has posted the daily low and the 5-day Average Daily Range is still pending.

In other words, the 5-day Average Daily Range hasn't been fulfilled for the day. London has made the low of the day so far. We've rallied from London, price is retracing during New York, and it's trading down below a 5-minute short-term low.

[12:24] When it does that, we buy long below that short-term low with the mindset that it's a Turtle Soup. It's coming back for short-term sell stops, and we're looking for expansion toward the 5-day Average Daily Range.

The sell setup is just the opposite. During the New York session up to 10:00 a.m. New York time, we're going to be scouting short-term highs formed during the New York open, trading short after New York probes those highs while the London session has posted the daily high and the 5-day Average Daily Range for that particular day is still pending.

[13:01] Again, it's the same scenario, just reversed. We're looking for a day where London has already posted the daily high, or there's a high probability that it has.

The New York session has a small retracement higher and trades above a short-term 5-minute high. It's taking out buy stops above that short-term 5-minute swing high, and the 5-day Average Daily Range low has not yet been met. That's the condition we're looking to trade in.

We're timing off a 5-minute chart.

New York Entry Confluence

[13:36] Again, we're targeting 20 pips, fixed, with a 20-pip stop loss.

So what does that look like? We have Aussie-Dollar here on a 5-minute chart. Price made a low in London, had some expansion higher, and then retraced. On the 5-minute chart, we can see a short-term low violated, and price also trades back down into—what can you see?—a 5-minute Fair Value Gap, and back down into an Order Block as well.

Price expands 20 pips—well beyond 20 pips, actually. Nonetheless, this is the reason why I expected Aussie-Dollar to trade up and make a higher high during our live New York session this past Friday.

[14:25] This was the actual pattern I saw and why I said we were going to see a higher high. Here it is. You can see it.

Here's another example. Again, London creates the potential low of the day. We get expansion higher during the New York session. Price comes down below a 5-minute short-term low, trades through it, quickly rejects out of there, and then moves much more than 20 pips higher.

But 20 pips is shaded in blue so you can see the scalp that would've been available to you.

[14:59] Okay, this is Euro-Dollar. Same premise. We have the London open creating the high of the day. Price trades lower, then we get a retracement during the New York session. It comes back above a 5-minute short-term high for buy stops that had been trailed down.

Once that short-term high has been violated, we're selling short above it, looking for 20 pips. You can see the 20 pips is easily taken in this example.

Not all of them are going to pay like that, but the 20 pips is very clearly available here.

[15:36] And sometimes, like in this example here for Dollar-CAD, you can get more than one setup in the same trading day. In other words, you can get multiple setups.

You're trading off a 5-minute chart, so there's a lot of potential for price to come back down below short-term lows if it's going to be a rather choppy day with expansion later in the afternoon.

Here we have a London low formed, and price has expanded and taken out the high that was formed in early Frankfurt.

[16:14] Price trades down, makes the low in London, then trades up. During the New York open, it trades all the way back down below a 5-minute short-term low. Stops have been taken, and price easily rallies 20 pips from that low, giving you profitability.

Then we have a later opportunity where another 5-minute low is violated and price expands well beyond 20 pips again.

So there are two opportunities in this particular currency pair. And it's Dollar-CAD of all pairs, which is generally a really low-volatility pair.

Continuation Context and Applications

[16:52] But you can see how, even in this type of environment, you can scalp out 20 pips.

The premise is that you have to have strong conviction about what London has already done, and we're looking for that continuation in the New York session.

The ideal scenario is to look for a 5-minute low, let them break down below that 5-minute low, because what they're doing is trying to entice short sellers and breakout traders, while also knocking out those individuals who are already long and would stand to profit from the next leg higher in price.

[17:26] This pattern is a wonderful pattern if you want a really strict guideline for how to go into the Forex market and trade it.

It's actually a really good pattern for S&P trading too. So if you're an ES trader, you can use this same pattern. It's very, very good on ES. It's good for Dow futures and QQQs. It's good for stock trading too.

If you're a day trader in stocks, you can pull up a 5-minute chart and use this as a very good pattern there as well.

[17:57] I don't advocate day trading stocks because the volume usually isn't enough to push them around, but you can look there and you'll see that this pattern works very, very well.

It's really one of those universal patterns that you can apply to almost everything—commodities, bonds, and all that business.

Hopefully these two concepts have given you a more focused approach for how you can go in and look for short-term intraday opportunities. They're not always there, but generally, if you look across enough pairs and you're just going to be doing short-term intraday scalping, if you really push it, there's something you can practice on every day.

[18:37] And notice I said practice, because I don't want you thinking you can go in every single day and try to day trade for 20 pips.

But if you look across a large enough group of pairs—say 10 or 15—you'll find something like this setting up almost every single trading day.

So until the next lesson, I wish you good luck and good trading.